This a Guest Blog Post by Mr . Saurabh Dhawan. Saurabh is 22 years of age and is pursuing MBA from IIPM. He can be contacted at saurabh [dot] 3767 [at] gmail [dot] com.

There has been an uptrend in property prices in Delhi NCR which has gone up really fast and out of the hand of a common middle class population to buy a flat in NCR. Its high time that the builders should experiment with the taste buds of buyers and try their hand at STUDIO Apartments. A Studio apartments are typically one room sets that have an attached kitchen and bathroom. Such apartments may or may not have an attached verandah too. Studio apartments are quite popular in places like Mumbai and Banglore etc but the trend has not yet picked up in Delhi NCR.

If we look at feasibility of an Studio Apartment in NCR then they are very much feasible. A large number of young executives are working in Delhi NCR coming from different places around India. A number of foreign Banks, BPOs, Multi national corporations and big Indian companies have their offices in and around Delhi. The young executives generally enjoy a rich disposal income and enjoy a superior lifestyle along with young married couples or for even that matter for guests of corporate houses who prefer to live and cook alone a studio apartment can provide a home along with privacy.

A Studio apartment can be in range from 250 Sq Ft onwards till 1000 Sq Ft depending on the luxuries one wants to enjoy or add. Like a 300 Sq Ft apartment can have a room with kitchen and attached bathroom and say a 600 Sq Ft room can have a lounge for sitting with a study and 1000 Sq Ft can have a big room with Dining and Lounge along with a verandas and optional parking lots can also be offered to the buyers. A studio apartment can range anywhere between 8,00,000 to 45,00,000 in case of super luxurious studio apartments.

The concept can be a hit if the Builders sell fully furnished ready to move studio apartments to buyers who want single rooms yet elegant and luxurious rooms along with all the facilities like modular kitchen, furnished and augment the profit of the builder thus saving the wasteful time and cost of the buyer to get it furnished.

In the time when the interest rates are high and the buyers do not want to dig deep into their pockets to purchase a home these studio apartments can be a life saver for builders too who are facing liquidity crunch and lack of demand in market.

Saurabh Dhawan

Vikas Rikhye,India Real Estate Blogger

In one of my articles I had mentioned that we never seem to hear about real estate investors who go bankrupt.I had also cautioned that it does not happen very often unless the decision is rash or it is due to lack of basic relevant information and facts.

But I am sorry to state that in the recent past many innocent investors have been trapped by the” Rosy pictures painted” by some of the masterminded Broker Turned Builders (BTBs) who wanted to enter the real estate market as New Players for New Real Estate Projects.Neighbor’s prosperity, News paper &,T.V. advertisement backed up with lucrative assurance of their neighborhood broker was good enough for them to be tempted them to get ready for a Bright & Prosperous future through investment in property.

The new investor having lured by “Real Estate Prosperity” all around got eager to join the “Prosperity Race”. It is understood that while some had
put in their life time savings ,others managed to raise funds at a very high rate of interest & some had raised funds to invest in property by selling their personal belongings as well as inherited gold ornaments.

In 2006-2007 as we all know that “Unheard investment destinations” were being advertised with New Townships besides NCR townships with:

1.Pre-launch offers

2.Rock bottom Prices

3.Assuring heavy return on investment

4.Costly Sales Brochures depicting Quality of life matching International Standards supported by strategically designed marketing techniques

5.Heavy commission to Brokers

6.Cocktail Dinners on Pre-launch (In ***** Hotels)

7.Luxury Cars as gifts on achieving Sales Targets

All this as stated above was good enough for these investors to have the direction, they had in mind.

I often use to wonder ,that how would a builder be able to bear such expensive cost of marketing and yet would be able to deliver the promised project.

I could feel very close to the answer, when I remembered my Business Guru’s saying ‘The Brower who pays 10% interest never returns the original capital”

As I understand almost same thing happened, as while many of the smart investors made a quick buck at the same time where “Fly by Night Operators “have disappeared or Builder/ Promoter has failed to deliver the project, many of the victims are either running from pillar to post for refund or some accepted it as a bad luck/wrong decision .

At the same time some of the ‘Stay Back’ Builders are asking for future installments without any visible progress as the payment plan seems to be time bound & not construction linked

In Gurgaon after master plan 2021 has earmarked 58 new Sectors,
I understand from news paper advertisement that some of the new Developers are offering apartments in remote locations at a lesser price ranging 2200-2500 per sq.ft with 15% Cost along with application along with a 45day PDC of 10%, which means that with 25% of the selling cost builder receives almost more than 40% of his cost ,without even starting the construction & since the remaining payment is construction linked, therefore apparently the developer has already got his chunk of profit and yet stays in the business at the cost of his investor’s money having a stake free existence .

Secondly, even if the builder delivers the project in time in these remote locations, how would that become livable in absence of basic infrastructure like Public Transport , Sewer, Electricity ,Water etc.

Whereas , so called booming almost 12 years old “New township of Gurgaon” still is awaiting its “Infrastructure dream” to come true

It is also noticed that some of the better known builders are selling Builder floors , which as per present rules do not enjoy a clear title on secondary sales ,where, in some of the cases the builder has already taken more than 25% of the price, without any visible progress

I very frequently get, desperate phone calls from some of such investors, that they would like to get rid of their investment at any cost in some cases they are ready to sell out the booked property below cost

The scene of the Gurgaon shopping malls is no less gloomy as few of the specialized malls give a deserted look awaiting the occupants & investors/owners are asked to pay Maintenance charges, while others Malls which are under construction have slowed down the construction process with a fear of lack of occupancy.

IT office space / IT Parks ( victim of overtrading) had become an investor’s craze , who are continuing to invest ,without realizing the Government’s Plans & Policy.

To me it seems “Some can not think due to lack & greed of money others
Can’t think due to overdose of money”

What are the facts you should check before buying a property??

Mr. Rikhye,Realtor and Real Estate Promoter

Real Estate in Gurgaon still has its Graph moving upwards .The new investor having his eyes on the neighbor’s “Real Estate Prosperity” is eager to join the “Prosperity Race”.

The new investor musters his resources, raising funds may be in some cases taking loan, to prepare himself for this rat race.

Before investing hard earned money one has to ensure the following:

• Financial Credibility of the promoter/builder.

• Professional Capability of the promoter/builder to deliver the Project in time.

• Past Projects delivered by the Promoter/Builder.

• Ownership title of the Project.

• Necessary Government approvals to start the project.

• Names of the Banks which have approved the project for Loan Purposes.

• Exit Clauses (That is in case, you wish to sell your property before completion of Project)

Not forgetting to go through the clauses of ” Buyer Seller Agreement” with the Builder and if required take an Expert’s opinion before getting into this Race…….

Comments Please

What is Real Estate? 

Land and anything permanently attached to the land whether by nature or by person.

Why invest in Real Estate?

Mr. Rikhye,Realtor and Real Estate Promoter

So many times we hear about investors who made a lot of money by investing in stocks and also about those investors who lost every thing they had.

We never seem to hear about real estate investors who go bankrupt, however, that’s because it does not happen very often unless the decision is rash or it is due to lack of basic relevant information and facts.

That’s right: Those individuals who invested wisely in real estate many years ago are having a very comfortable lifestyle, as Investing in real estate can garner interesting returns.

Real Estate and Economy are very closely related, as whenever there is economic growth in “Certain region” it automatically gives a massive boost to real estate.

It reminds me of a saying “Human Population is growing while land is limited thus the Real estate would always boom”

Mr Vikas Rikhye,Realtor and Real Estate Promoter

The History of Pre launch goes as back as about four years that is late 2004, when the real estate business was about to “Take off’. Some of the masterminded Broker Turned Builders (BTBs)wanted to enter the real estate market as New Players for New Real Estate Project.

Having a basic support of the large client/investor-base & Fellow Broker Network they designed a scheme to raise funds from profit hungry small investors from the market with a very clear objective to generate interest free money to implement the project.

Usually in real estate the word Pre launch means that the Builder/ Promoter has purchased the land on which a project is to be developed (& in some cases, the builder may not have the possession of the land, he might have an agreement to sell/collaborate with the owner of the land).

The promoter/builder offers to sell the property at discounted price (directly or thru Broker net-work) before the formal launch.

It means the following:

• At this stage Regulatory, legal and formal Government approvals are awaited.
• Land title might not be clear.
• Due to some other Legal reason its Formal Launch can not be done

It is also undermined that Builder instead of utilizing his own investment resources, is trying to raise interest free monetary reserve from investors, to pay off the Land owner Govt .fees, Initial infrastructure/construction cost etc.

Many experts feel that there is no wrong as the investor is aware of the risk involved.

In many states pre-launch bookings have been banned to Curb the malpractices by dubious operators. It is also understood that the Promoters /Developers have been banned to release advertisements about projects that do not have necessary approvals.

It is noticed that “Reputed Real estate companies” have never launched any of the luring Pre launch schemes.

The Pre-launch fever started spreading in other part of Northern including prominent towns like Amritsar, Patiala,Luhiana,Japur,Bhewadi,Neemrana,Alwar,Rudharpur and many more are under its grip.

While many of the smart investors made a quick buck at the same time where “Fly by Night Operators “have disappeared or Builder/ Promoter has failed to deliver the project, many of the victims are either running from pillar to post for refund or some accepted it as a bad luck/wrong decision.